Acumatica Cloud ERP provides construction-specific functionality designed to handle the complexities of commercial project management. From initial project setup through change order processing and final billing, the system enables contractors to maintain visibility into project costs, manage subcontractor commitments, and produce accurate financial reports. This guide walks through the core construction module features that support commercial contractors in managing their project lifecycles effectively:
Navigating the Construction Workspace
Understanding the Main Menu Structure
The Construction module in Acumatica serves as the central hub for all project-related activities. Users access this workspace through the main menu on the left side of the interface, where the construction module displays all available functions and screens.
The workspace can be customized using the gear icon to check or uncheck specific functions based on individual user needs. Though system administrators can establish default workspace configurations, each user has the flexibility to personalize their view without affecting other team members’ setups.
Using Favorites for Efficient Navigation
Rather than navigating through multiple workspace menus, users can create a Favorites menu by clicking the star icon next to frequently used screens. This feature aggregates commonly accessed functions from various modules — Construction, Time and Expense, Purchase Orders — into a single, customized view.
The favorites approach proves particularly valuable for commercial project managers who need quick access to project creation screens, change order management, and billing functions without repeatedly drilling down through the full construction workspace hierarchy.
Key Workspace Tiles and Functions
The construction workspace includes several tiles at the top representing common actions:
- New Project Creation: Initiates the project setup process for commercial jobs New Change Orders: Creates budget modifications when project scope changes Project Transactions: Displays all financial transactions tied to projects, functioning as a ledger for project-related costs and revenue
Most project transactions flow into the system automatically from other modules such as accounts payable, purchase orders, or inventory. These transactions create a complete financial record when documents include project references, eliminating the need for manual transaction entry in most cases.
Setting Up Commercial Construction Projects
Project Templates and Branch Configuration
Commercial construction firms often operate multiple business divisions with distinct operational requirements. Acumatica addresses this need through project templates that can be configured by branch, allowing residential and commercial divisions to maintain separate project structures while sharing the same system instance.
Project templates define default settings including:
- Cost code structures aligned with division-specific needs
- Default GL accounts for revenue and cost recognition
- Billing rules appropriate to contract types
- Standard project tasks reflecting typical scope divisions
When creating a new commercial project, selecting the appropriate template automatically populates these defaults, reducing setup time while ensuring consistency across similar project types.
Project Identification and Classification
Each project requires a unique identifier that remains permanent throughout the project lifecycle. This ID appears on all related transactions, reports, and documents, serving as the primary reference for tracking costs and revenue.
The project description field allows for more detailed identification information. Many contractors include the customer name, project address, or other relevant details here to improve searchability when multiple projects exist for the same customer.
Project status controls which actions users can perform:
- Planned: Project setup phase; no transactions allowed
- Active: Normal operating status; all transactions permitted
- Completed: Financial close; billing still possible but no new costs
- Closed: Full closure; no new transactions of any type
Defining Project Tasks
Project tasks represent how users organize and track project costs and revenue. In Acumatica Construction Edition, tasks typically align with one of two common structures:
- Phase-Based Structure: Tasks represent major project phases such as Site Work, Foundation, Framing, Mechanical, Electrical, Plumbing, and Finishes. This approach works well for projects where contractors need to track progress and profitability by construction phase.
- Cost Code Structure: Tasks mirror the cost code system used for estimating and job costing, often following divisions from the MasterFormat or similar classification systems. This approach provides detailed cost tracking aligned with industry-standard categorization.
The task structure established during project setup determines how all costs and revenue flow through the project. Budget amounts, billing rules, and financial reporting all reference these task definitions.
Managing Change Orders and Budget Modifications
Change Requests vs Change Orders
Acumatica distinguishes between Change Requests and Change Orders to support different stages of the change management workflow:
- Change Requests: Preliminary pricing submissions when customers ask for modifications before approving scope changes. These requests create a record of proposed pricing but do not modify the project budget. Commercial contractors use change requests to document pricing discussions with general contractors or property owners before receiving formal approval.
- Change Orders: Approved modifications that update the project budget and schedule of values. Once a change request receives approval, contractors convert it to a change order, which updates revenue budgets and modifies billing line items to reflect the new scope.
This two-step process maintains a clear audit trail of proposed changes, approved modifications, and the resulting budget impacts throughout the project lifecycle.
Processing Budget Modifications
When creating a change order, contractors specify which tasks the Change effects. The system allows modifications to:
- Revenue amounts (contract value increases or decreases)
- Cost budgets (expected cost impacts)
- Billing line items (schedule of values adjustments)
For time-and-materials projects or cost-plus contracts, change orders may only update cost budgets without modifying revenue commitments. Fixed-price projects typically require updates to both revenue and cost budgets to maintain accurate profitability tracking. The Change Order screen displays both original budget amounts and revised totals, providing clear visibility into how approved changes affect overall project financials.
Billing and Revenue Recognition
Pro Forma Invoicing for AIA Billing
Commercial construction projects frequently require American Institute of Architects (AIA) billing formats, commonly known as schedule of values billing. Acumatica’s pro forma invoice process supports this requirement through a two-step approach:
- Pro Forma Creation: Project managers enter percent complete values for each billing line item. The system calculates billing amounts based on these percentages and the total contract value for each line. This creates a draft invoice showing current progress, previous billings, and the current billing amount.
- Invoice Conversion: After review and approval, the pro forma converts to an accounts receivable invoice. This conversion creates the formal billing document while maintaining the connection to project budgets and cost tracking.
Projects Without AIA Billing Requirements
Not all commercial projects require detailed schedule of values billing. Some contracts use simplified billing approaches where contractors submit invoices on project-specific forms or templates provided by the customer.
For these situations, Acumatica provides flexibility through the project settings. Disabling the “Create Proforma on Invoice” option allows contractors to bypass the pro forma process entirely. Instead, they create accounts receivable invoices directly, recording revenue without the detailed progress billing workflow.
Retainage Configuration
Many commercial construction contracts include retainage provisions where customers withhold a percentage of each progress payment until project completion. Acumatica handles retainage at multiple levels:
- Customer-Level Retainage: Default retainage percentages can be set on customer records, automatically applying to all projects for that customer unless overridden.
- Project-Level Override: Individual projects can use different retainage percentages than the customer default, accommodating contract-specific requirements.
- GL Account Requirements: Retainage requires dedicated general ledger accounts to properly track amounts withheld and amounts released. These accounts should be configured on customer records before processing the first retainage invoice to ensure accurate financial reporting.
The system automatically calculates retainage amounts during billing based on the configured percentage, reducing manual calculations and improving billing accuracy.
Subcontractor Management and Cost Tracking
Creating Subcontractor Agreements
Subcontractor agreements in Acumatica document the commitments contractors make to their subcontractors and suppliers. These agreements serve multiple purposes:
- Establishing cost commitments that appear in budget tracking
- Providing a reference for accounts payable invoice matching
- Creating work order authorizations for billing against agreements
- Generating compliance documentation when required
Each agreement connects to one or more project tasks, allowing contractors to track which portions of the project scope each subcontractor covers. The agreement amount creates a cost commitment that appears in project reports, enabling comparison between committed costs and actual costs incurred.
Work Orders and Billing Tracking
When subcontractors complete work under their agreements, contractors create work orders to authorize billing. Work orders reference:
- The parent subcontractor agreement
- Specific tasks where the work was performed
- Quantities or amounts completed
- Any applicable change orders
As subcontractors submit invoices, accounts payable staff match those invoices to work orders and the original agreement.
Cost Management and Budget Tracking
Original vs Revised Budgets
Acumatica maintains separate tracking for original budgets and revised budgets throughout the project lifecycle. This distinction enables contractors to analyze how change orders and scope modifications affect project profitability:
- Original Budget: The initial cost and revenue estimates remain fixed, providing a baseline for comparison throughout the project.
- Revised Budget: Updates automatically when change orders are approved, reflecting the current expected costs and revenue including all approved modifications.
Project reports display both budget versions, allowing project managers to assess whether changes are improving or eroding the profit margins established in the original estimate.
Commitment Tracking
Beyond tracking actual costs incurred, Acumatica provides visibility into committed costs through purchase orders and subcontractor agreements. This forward-looking cost view helps project managers anticipate cash needs and assess whether remaining budget will cover outstanding commitments.
The commitments inquiry displays:
- Purchase order amounts not yet received or invoiced
- Subcontractor agreement amounts not yet billed
- Remaining budget after subtracting both actual and committed costs
Work in Progress and Financial Reporting
WIP Calculations for Project Accounting
Work in progress calculations represent one of the most critical aspects of construction accounting. These calculations determine how much revenue and cost contractors recognize in each accounting period based on project progress.
Acumatica supports multiple revenue recognition methods:
- Percentage of completion based on costs incurred
- Percentage of completion based on units completed
- Completed contract (no revenue recognition until completion)
- When billed (revenue recognized upon customer billing)
For commercial projects using percentage-of-completion accounting, the system compares actual costs incurred against total estimated costs to calculate an earned revenue percentage. This percentage then applies to the total contract value to determine recognized revenue.
Project Summary Reporting
The project summary inquiry provides a high-level financial snapshot including:
- Original and revised budget amounts
- Costs incurred to date
- Open commitments (purchase orders and subcontracts)
- Remaining budget after committed costs
- Amounts billed to customers
- Current profit margins
Advanced Features for Commercial Operations
Compliance Documentation and Attributes
Commercial construction often involves compliance requirements that vary by project, customer or contract type. Acumatica’s attribute functionality allows contractors to track custom data points at the project level:
- Insurance requirements and expiration dates
- Bonding information
- Prevailing wage determinations
- Safety certifications
- Customer-specific compliance items
Attributes can be configured differently for commercial versus residential divisions, ensuring each business unit captures the compliance information relevant to their typical contracts without cluttering screens with irrelevant fields.
Document Management Integration
Commercial projects generate substantial documentation including contracts, submittals, change order authorizations, and progress photos. Acumatica provides file attachment capabilities at the project level, allowing teams to associate critical documents directly with project records. For firms requiring more comprehensive document management, integration options exist with Microsoft 365 and other document control systems.
Master Service Agreements
Some commercial contractors maintain ongoing relationships with customers under master service agreement structures. These agreements establish terms and conditions for multiple projects over extended periods.
While Acumatica includes contract management functionality within the accounts receivable module, commercial construction firms often track these master agreements separately from individual project records. The project setup then references the relevant master agreement to ensure consistent terms across related projects.
System Configuration Considerations
Branch Restrictions and Data Visibility
Multi-branch operations require careful configuration to ensure commercial and residential teams see only their relevant projects. Acumatica supports this requirement through branch restrictions at multiple levels:
- Customer records can be restricted to specific branches
- Projects inherit branch assignments from customers
- Users’ role assignments control which branches they can access
This security structure prevents cross-division data access issues while maintaining consolidated reporting capabilities for executive management who need visibility across all business units.
Template Standardization
As commercial operations mature in Acumatica, organizations benefit from investing time in template refinement. Well-designed templates:
- Reduce new project setup time
- Ensure consistency in cost tracking structures
- Minimize training requirements for new team members
- Improve report standardization across projects
Template maintenance should be an ongoing process, incorporating lessons learned from completed projects to continuously improve the starting point for new work.
Leverage Acumatica Cloud ERP for Your Construction Business
SWK Technologies is here to help your firm implement your Acumatica Cloud ERP system and optimize it to your needs, whether you are a general contractor, subcontractor, specialty trade contractor or work anywhere else within the construction industry. Our team of expert consultants will help you tailor your business management solution to match your workflows and growth objectives, and ensure that you get the most out of your software investment.
Contact SWK here to learn more about Acumatica’s construction capabilities and explore how the platform can improve your project management and financial controls.